1 00:00:04,050 --> 00:00:08,280 Michael Thompson: Australia's most powerful regulators say higher interest rates aren't causing 2 00:00:08,280 --> 00:00:12,809 Michael Thompson: widespread financial distress. The value of lithium stocks surpasses the 3 00:00:12,809 --> 00:00:16,079 Michael Thompson: value of gold stocks for the first time, and Lennon 4 00:00:16,079 --> 00:00:20,220 Michael Thompson: and McCartney are back together thanks to AI. It's Thursday 5 00:00:20,220 --> 00:00:24,239 Michael Thompson: the 15th of June 2023. Welcome to Fear & Greed, Australia's 6 00:00:24,239 --> 00:00:27,780 Michael Thompson: most popular business podcast. I'm Michael Thompson, and good morning, 7 00:00:27,780 --> 00:00:28,650 Michael Thompson: Sean Aylmer. 8 00:00:28,770 --> 00:00:29,940 Sean Aylmer: Good morning, Michael. 9 00:00:30,330 --> 00:00:33,209 Michael Thompson: Sean, after the show you have an interview, a cracking 10 00:00:33,210 --> 00:00:37,380 Michael Thompson: interview for investors. You're speaking to Dermot Ryan, Portfolio Manager 11 00:00:37,560 --> 00:00:39,810 Michael Thompson: at Renaissance Smaller Companies Fund. 12 00:00:40,110 --> 00:00:43,200 Sean Aylmer: Yeah, all about investing in small caps. As Dermot points 13 00:00:43,200 --> 00:00:47,400 Sean Aylmer: out, the small cap index has underperformed the main index 14 00:00:47,400 --> 00:00:50,610 Sean Aylmer: and certainly the large cap index quite substantially. So Dermot 15 00:00:50,610 --> 00:00:51,989 Sean Aylmer: thinks maybe it's time to have a bit of a 16 00:00:51,990 --> 00:00:55,049 Sean Aylmer: sniff around so in these small cap companies. He throws 17 00:00:55,050 --> 00:00:56,910 Sean Aylmer: a few names at us that he's interested in for 18 00:00:56,910 --> 00:01:00,210 Sean Aylmer: sure. Well worth a listen, particularly if you're an investor. 19 00:01:00,420 --> 00:01:02,550 Michael Thompson: Yeah, it certainly is. It is a cracker. It's coming 20 00:01:02,550 --> 00:01:04,050 Michael Thompson: up a little bit later on. The main story this 21 00:01:04,050 --> 00:01:08,639 Michael Thompson: morning though, Sean, the Council of Financial Regulators, which sounds 22 00:01:08,639 --> 00:01:09,899 Michael Thompson: very ominous really, doesn't it? 23 00:01:10,260 --> 00:01:10,649 Sean Aylmer: It does. 24 00:01:10,949 --> 00:01:15,569 Michael Thompson: Has backed the banking watchdogs enforcement of a 3% serviceability 25 00:01:15,569 --> 00:01:17,729 Michael Thompson: buffer when assessing home loan applicants. 26 00:01:17,940 --> 00:01:22,889 Sean Aylmer: Yes. That's despite borrowers finding it increasingly difficult to refinance 27 00:01:22,889 --> 00:01:25,919 Sean Aylmer: their mortgages with different lenders at higher interest rates. Now, 28 00:01:25,920 --> 00:01:29,730 Sean Aylmer: the serviceability buffer is all important. It's the amount extra 29 00:01:30,330 --> 00:01:33,450 Sean Aylmer: that a borrower needs to be able to afford above 30 00:01:33,450 --> 00:01:35,850 Sean Aylmer: the rate being charged when it gets the home loan. 31 00:01:35,880 --> 00:01:38,580 Sean Aylmer: It's a security measure. The problem is that many mortgage 32 00:01:38,580 --> 00:01:42,059 Sean Aylmer: holders have rolled off fixed rate loans onto much higher 33 00:01:42,059 --> 00:01:45,238 Sean Aylmer: variable rates. What do they do? They go and see 34 00:01:45,240 --> 00:01:47,670 Sean Aylmer: what else is out there. Sensible decision to do that. 35 00:01:48,059 --> 00:01:50,700 Sean Aylmer: The problem is the buffer prevents them from switching loans 36 00:01:50,700 --> 00:01:53,010 Sean Aylmer: to get a better deal because they can't afford that 37 00:01:53,010 --> 00:01:55,830 Sean Aylmer: extra 3%. So the argument is it is much too 38 00:01:55,830 --> 00:01:58,770 Sean Aylmer: high. It should only be 1% or 2%. The council, 39 00:01:58,770 --> 00:02:01,139 Sean Aylmer: however, which is made up of the Reserve Bank Treasury, the 40 00:02:01,139 --> 00:02:05,010 Sean Aylmer: Australian Securities and Investments Commission, and the Australian Prudential Regulation 41 00:02:05,010 --> 00:02:08,760 Sean Aylmer: Authority, which is e- banking watchdog we mentioned, said households 42 00:02:08,760 --> 00:02:12,270 Sean Aylmer: are experiencing significant pressure on their finances as they grapple 43 00:02:12,270 --> 00:02:16,559 Sean Aylmer: with increased interest rates and inflation. However, they think the 44 00:02:16,559 --> 00:02:20,879 Sean Aylmer: 3% should remain. Their argument, which is fair enough, is 45 00:02:20,880 --> 00:02:23,190 Sean Aylmer: that you actually have to put that buffer in, so 46 00:02:23,190 --> 00:02:26,010 Sean Aylmer: if rates go much higher, people are still able to 47 00:02:26,010 --> 00:02:26,940 Sean Aylmer: afford home loans. 48 00:02:27,780 --> 00:02:30,480 Michael Thompson: That is a very high powered council. And they also 49 00:02:30,690 --> 00:02:34,019 Michael Thompson: said that the 12 rate rises since early May last 50 00:02:34,020 --> 00:02:38,010 Michael Thompson: year hadn't triggered widespread financial distress. 51 00:02:38,758 --> 00:02:42,539 Sean Aylmer: That's right. And that comment provides support somewhat for the 52 00:02:42,540 --> 00:02:45,810 Sean Aylmer: Reserve Bank to keep lifting rates if it feels it's 53 00:02:45,810 --> 00:02:49,380 Sean Aylmer: necessary. Today's labor force figures will give some guide on 54 00:02:49,380 --> 00:02:52,559 Sean Aylmer: that particular issue. The council, which is chaired by Reserve 55 00:02:52,559 --> 00:02:55,139 Sean Aylmer: Bank Governor, Phil Lowe, found that the cost of Living 56 00:02:55,139 --> 00:02:58,829 Sean Aylmer: crunch, higher mortgage bills and climbing rents has left some 57 00:02:58,829 --> 00:03:03,570 Sean Aylmer: households suffering significant pressures on their finances. But it also 58 00:03:03,570 --> 00:03:06,960 Sean Aylmer: said most households are well placed to manage the impact 59 00:03:06,960 --> 00:03:10,469 Sean Aylmer: on budgets due to strong labor market conditions and sizeable 60 00:03:10,500 --> 00:03:14,369 Sean Aylmer: saving buffers. Put all that together in the Mixmaster, Michael, in the Mixmaster- 61 00:03:16,559 --> 00:03:17,821 Michael Thompson: You do love your bizarre cooking analogies. 62 00:03:17,821 --> 00:03:23,910 Sean Aylmer: I love my Mixmaster. Where you do end up with this we 63 00:03:23,910 --> 00:03:27,210 Sean Aylmer: hear plenty about higher rates and cost of living pressure 64 00:03:27,210 --> 00:03:30,570 Sean Aylmer: and certainly it's a big political issue, but the regulators 65 00:03:30,570 --> 00:03:34,049 Sean Aylmer: are saying, " Yep, it is an issue, but we're not 66 00:03:34,049 --> 00:03:36,390 Sean Aylmer: seeing a lot of distress out there yet," so they're 67 00:03:36,390 --> 00:03:39,120 Sean Aylmer: perhaps a little calmer about it than the politicians are. 68 00:03:40,290 --> 00:03:45,420 Michael Thompson: I just love the Council of Financial Regulators. It sounds 69 00:03:45,420 --> 00:03:47,940 Michael Thompson: so cool. When I picture that, I picture the meeting 70 00:03:47,940 --> 00:03:51,420 Michael Thompson: in a very dark room all wearing kind of cloaks 71 00:03:52,230 --> 00:03:54,869 Michael Thompson: and things and maybe Yoda is there? 72 00:03:55,140 --> 00:03:58,350 Sean Aylmer: Oh yeah. Led by Yoda Lowe. 73 00:04:00,630 --> 00:04:03,300 Michael Thompson: Do you reckon Phil Lowe has ever been called Yoda 74 00:04:03,300 --> 00:04:04,020 Michael Thompson: Lowe before? 75 00:04:05,610 --> 00:04:06,420 Sean Aylmer: He's a very thin man. Maybe. 76 00:04:08,160 --> 00:04:10,799 Michael Thompson: Yoda Lowe sounds like someone who would come from Switzerland. 77 00:04:11,010 --> 00:04:13,140 Sean Aylmer: Well, that's got a Sound of Music sort of feel 78 00:04:13,140 --> 00:04:13,531 Sean Aylmer: to it, hasn't it? Yoda Lowe. 79 00:04:13,531 --> 00:04:15,990 Michael Thompson: It certainly does. Goodness me, you've taken us to a 80 00:04:15,990 --> 00:04:18,960 Michael Thompson: strange place, Sean. Local markets. How did they perform yesterday? 81 00:04:18,961 --> 00:04:27,269 Sean Aylmer: The S & P ASX 200 closed up 0.3% to 7, 000... Yoda Lowe. That's got 82 00:04:27,270 --> 00:04:32,400 Sean Aylmer: me going. Anyway, the market was up 0. 3% to 7, 162 83 00:04:32,400 --> 00:04:35,040 Sean Aylmer: points. Good day for lithium stocks, not so much the 84 00:04:35,040 --> 00:04:39,990 Sean Aylmer: healthcare sector, particularly CSL. More on that shortly. Materials stocks 85 00:04:39,990 --> 00:04:42,928 Sean Aylmer: were easily the best performers while financials also did well. 86 00:04:42,928 --> 00:04:46,049 Sean Aylmer: The healthcare sector tanked while tech stocks had a rough 87 00:04:46,049 --> 00:04:49,109 Sean Aylmer: day. Now, mostly it was about China's decision to cut 88 00:04:49,139 --> 00:04:53,400 Sean Aylmer: some interest rates on Tuesday in expectations of a further 89 00:04:53,400 --> 00:04:56,730 Sean Aylmer: stimulus in the world's second largest economy. That helped push 90 00:04:56,730 --> 00:04:58,559 Sean Aylmer: up the price of iron ore, which is a big 91 00:04:58,559 --> 00:05:01,650 Sean Aylmer: ingredient for steel, of course. As a result, BHP share 92 00:05:01,650 --> 00:05:06,719 Sean Aylmer: price jumped 3.6%, Fortesque Metals was up 4.3% and Rio Tinto 93 00:05:06,720 --> 00:05:11,250 Sean Aylmer: rose 2. 9%. Otherwise, Macquarie Group, Westpac, National Australia Bank, 94 00:05:11,250 --> 00:05:13,440 Sean Aylmer: and Woodside all rose more than 1%. On the flip 95 00:05:13,440 --> 00:05:16,889 Sean Aylmer: side, WiseTech Global and Zero were off around 2%, and Aristocrat 96 00:05:16,889 --> 00:05:17,849 Sean Aylmer: Leisure was down 1.5%. 97 00:05:19,110 --> 00:05:20,579 Michael Thompson: And what about international markets? 98 00:05:20,849 --> 00:05:23,910 Sean Aylmer: I mentioned higher iron ore prices. That was the big 99 00:05:23,910 --> 00:05:26,700 Sean Aylmer: news yesterday. Otherwise, not a lot of movement going in 100 00:05:26,820 --> 00:05:29,070 Sean Aylmer: on commodities. The Aussie dollars is doing pretty well though. 101 00:05:29,070 --> 00:05:32,100 Sean Aylmer: It's now buying just under 69 US cents. 102 00:05:32,490 --> 00:05:34,109 Michael Thompson: All right. We'll be back in a moment with the 103 00:05:34,110 --> 00:05:42,719 Michael Thompson: rest of the day's. Business news. Sean, as you mentioned 104 00:05:42,720 --> 00:05:46,800 Michael Thompson: earlier, CSL's share price tumbled 7% yesterday after the blood 105 00:05:46,800 --> 00:05:51,389 Michael Thompson: plasma group said earnings hadn't met expectations with weak margins 106 00:05:51,389 --> 00:05:52,920 Michael Thompson: in its blood collection centers. 107 00:05:53,190 --> 00:05:56,099 Sean Aylmer: The third largest company on the ISX also operates a 108 00:05:56,099 --> 00:05:59,039 Sean Aylmer: drugs division and yesterday flagged the impact of generic drugs 109 00:05:59,039 --> 00:06:03,719 Sean Aylmer: competing against its iron deficiency drug. While earnings this financial 110 00:06:03,720 --> 00:06:05,520 Sean Aylmer: year will come in at the top end of guidance, 111 00:06:05,820 --> 00:06:08,039 Sean Aylmer: it's the forecast for next year that sent the share 112 00:06:08,040 --> 00:06:11,639 Sean Aylmer: price lower. Profit margins at blood collection centers have been 113 00:06:11,639 --> 00:06:14,639 Sean Aylmer: hurt by Covid. People were more reluctant to give blood. 114 00:06:14,639 --> 00:06:18,149 Sean Aylmer: That meant CSL had to up incentives; normally that's payments 115 00:06:18,150 --> 00:06:21,060 Sean Aylmer: to donors. That's still hurting. The bad news is that 116 00:06:21,240 --> 00:06:23,820 Sean Aylmer: given competition in the market, CSL still has to pay 117 00:06:23,820 --> 00:06:27,178 Sean Aylmer: those incentives, those higher fees, hence profit margins are being 118 00:06:27,178 --> 00:06:30,870 Sean Aylmer: squeezed. Its share price of around $ 287 a share is 119 00:06:30,870 --> 00:06:33,748 Sean Aylmer: now about the same as it was immediately before the 120 00:06:33,750 --> 00:06:34,619 Sean Aylmer: Covid outbreak. 121 00:06:35,279 --> 00:06:38,190 Michael Thompson: 7%. That is a big drop. So investors would've really 122 00:06:38,190 --> 00:06:40,500 Michael Thompson: taken a bath on that one, a blood bath, if 123 00:06:40,500 --> 00:06:40,859 Michael Thompson: you will. 124 00:06:42,689 --> 00:06:45,539 Sean Aylmer: Oh, I was going to make a serious comment about it because CSL always upgrade. They 125 00:06:45,540 --> 00:06:49,110 Sean Aylmer: never downgrade. They've got a new CEO, it's his first 126 00:06:49,110 --> 00:06:51,900 Sean Aylmer: time and he comes and downgrades and you have just, 127 00:06:52,589 --> 00:06:53,789 Sean Aylmer: I don't know, trivialized it. 128 00:06:53,789 --> 00:06:56,820 Michael Thompson: I have, and it was quite a lengthy setup for it 129 00:06:56,820 --> 00:06:56,971 Michael Thompson: as well. 130 00:06:56,971 --> 00:06:58,230 Sean Aylmer: Yeah, yeah. 131 00:06:58,740 --> 00:07:01,380 Michael Thompson: Anyway, moving on. Sean, we move on to quite a 132 00:07:01,380 --> 00:07:05,700 Michael Thompson: serious story here. Federal Independent Senator Lidia Thorpe, has in 133 00:07:05,700 --> 00:07:12,989 Michael Thompson: parliament accused Victorian Liberal Senator David Van of " harassing" and again, " 134 00:07:13,530 --> 00:07:18,600 Michael Thompson: sexually assaulting" her, then hours later, she withdrew the allegation. 135 00:07:19,230 --> 00:07:23,070 Sean Aylmer: The allegations were made by Thorpe Soon after question time 136 00:07:23,070 --> 00:07:26,910 Sean Aylmer: yesterday as Van made a speech accusing the Labor Party 137 00:07:27,270 --> 00:07:30,509 Sean Aylmer: of disgraceful behavior in its handling of the Brittany Higgins 138 00:07:30,510 --> 00:07:34,470 Sean Aylmer: sexual assault allegations. As Van spoke, Thorpe could be heard 139 00:07:34,470 --> 00:07:38,340 Sean Aylmer: interjecting and calling out the word perpetrator. And then again, 140 00:07:38,340 --> 00:07:42,210 Sean Aylmer: I quote, " You can talk." Senate deputy president Andrew McLaughlin 141 00:07:42,210 --> 00:07:45,660 Sean Aylmer: attempted to stop Thorpe from interjecting, according to the Sydney 142 00:07:45,660 --> 00:07:48,389 Sean Aylmer: Morning Herald. Then the former Green Senator Rose on a 143 00:07:48,389 --> 00:07:53,250 Sean Aylmer: point of order and said, " I'm feeling really uncomfortable when 144 00:07:53,250 --> 00:08:00,300 Sean Aylmer: a perpetrator is speaking about violence." McLaughlin replied, " That's inappropriate, 145 00:08:00,360 --> 00:08:03,119 Sean Aylmer: and I have to ask you to withdraw that." Then 146 00:08:03,120 --> 00:08:05,820 Sean Aylmer: Thorpe responded, and again, I quote because it's important that 147 00:08:05,820 --> 00:08:09,420 Sean Aylmer: we get this exact, " I can't because this person harassed 148 00:08:09,420 --> 00:08:12,840 Sean Aylmer: me, sexually assaulted me." She went on, " And to have 149 00:08:12,840 --> 00:08:15,870 Sean Aylmer: him talking about this today is an absolute disgrace on 150 00:08:15,870 --> 00:08:19,559 Sean Aylmer: the whole party." As Thorpe sat down, McLaughlin said he'd 151 00:08:19,559 --> 00:08:22,199 Sean Aylmer: have to refer her comments to the Senate President Sue 152 00:08:22,199 --> 00:08:25,050 Sean Aylmer: Lines. Van then raised to his feet and said, and 153 00:08:25,050 --> 00:08:30,090 Sean Aylmer: I quote, " I utterly reject that statement, that disgusting statement outright, 154 00:08:30,330 --> 00:08:33,599 Sean Aylmer: it is just a lie and I reject it." Hours 155 00:08:33,599 --> 00:08:36,539 Sean Aylmer: later, after Van's lawyers had been in touch with Thorpe, 156 00:08:36,990 --> 00:08:40,259 Sean Aylmer: she withdrew the comments and said she'd have more to 157 00:08:40,260 --> 00:08:41,250 Sean Aylmer: say on it today. 158 00:08:41,609 --> 00:08:44,250 Michael Thompson: Yeah, very serious story there out of Canberra, Sean. Now, 159 00:08:44,309 --> 00:08:45,690 Michael Thompson: mentioned this one at the top of the show. The 160 00:08:45,690 --> 00:08:49,679 Michael Thompson: value of ASX listed critical minerals companies has surpassed the 161 00:08:49,679 --> 00:08:52,920 Michael Thompson: value of gold stocks for the first time demonstrating the 162 00:08:52,920 --> 00:08:55,740 Michael Thompson: weight of money going into green transition companies. 163 00:08:56,219 --> 00:08:59,129 Sean Aylmer: As of Tuesday nights close, the value of Major ASX 164 00:08:59,129 --> 00:09:05,970 Sean Aylmer: listed critical minerals companies was $ 86. 2 billion. That's up $ 8. 165 00:09:06,240 --> 00:09:08,970 Sean Aylmer: 6 billion in the past decade. According to the Financial 166 00:09:08,970 --> 00:09:12,480 Sean Aylmer: Review, the basket of the 25 companies that comprised the S & P ASX 167 00:09:12,480 --> 00:09:19,020 Sean Aylmer: all ordinary gold index was 86.1 billion, 0. 1 of a billion less. Companies 168 00:09:19,020 --> 00:09:22,020 Sean Aylmer: that mine minerals such as lithium rare earths, graphite and 169 00:09:22,020 --> 00:09:25,110 Sean Aylmer: nickel have gained favor over the past decade, and particularly 170 00:09:25,350 --> 00:09:28,708 Sean Aylmer: in recent years as governments declare them critical to de- 171 00:09:28,710 --> 00:09:32,669 Sean Aylmer: carbonization efforts and national security. There are now 88 lithium 172 00:09:32,670 --> 00:09:37,140 Sean Aylmer: producers or explorers on the ASX. That's about 4% of the 173 00:09:37,140 --> 00:09:41,338 Sean Aylmer: total number of companies on the (inaudible) . Australian miners 174 00:09:41,340 --> 00:09:44,520 Sean Aylmer: are now the world's biggest producer of raw lithium and 175 00:09:44,520 --> 00:09:47,189 Sean Aylmer: one of the biggest producers of rare earths outside China. 176 00:09:48,000 --> 00:09:51,750 Michael Thompson: Sean, senior executives at some of Australia's largest listed companies, 177 00:09:51,750 --> 00:09:56,250 Michael Thompson: pocketed average pay rises more than double the rate of inflation 178 00:09:56,340 --> 00:09:57,360 Michael Thompson: over the past year. 179 00:09:57,660 --> 00:10:00,809 Sean Aylmer: The base salaries of managing directors across ASX listed company 180 00:10:00,809 --> 00:10:04,439 Sean Aylmer: rose an average of 14% while CEO salaries rose an 181 00:10:04,440 --> 00:10:08,458 Sean Aylmer: average off 15% according to the latest Board and Executive 182 00:10:08,549 --> 00:10:12,690 Sean Aylmer: Remuneration Report released by the Governance Institute of Australia. Chief 183 00:10:12,720 --> 00:10:16,500 Sean Aylmer: Executive of the Institute, Megan Motto said with AGM season 184 00:10:16,500 --> 00:10:19,380 Sean Aylmer: looming, boards will need to have a strong narrative around 185 00:10:19,380 --> 00:10:23,010 Sean Aylmer: their remuneration policies to stand up to shareholder scrutiny and 186 00:10:23,010 --> 00:10:27,839 Sean Aylmer: manage reputation risks. The report also highlights that 42% of ASX listed 187 00:10:27,839 --> 00:10:32,189 Sean Aylmer: board directors and 71% of senior executives received a pay 188 00:10:32,190 --> 00:10:34,800 Sean Aylmer: rise in the last 12 months. And just before we 189 00:10:34,800 --> 00:10:37,679 Sean Aylmer: leave the subject of pay, the Reserve Bank yesterday came 190 00:10:37,679 --> 00:10:42,570 Sean Aylmer: out and said it had underpaid 1, 173 current and 191 00:10:42,570 --> 00:10:46,769 Sean Aylmer: former staff during the past seven years. It's pretty much 192 00:10:46,770 --> 00:10:50,490 Sean Aylmer: the most prestigious organization yet to be involved in the 193 00:10:50,490 --> 00:10:53,819 Sean Aylmer: underpayment of workers. Of course, there are many companies involved 194 00:10:53,820 --> 00:10:54,180 Sean Aylmer: in that. 195 00:10:54,630 --> 00:10:57,719 Michael Thompson: Well, absolutely, and everyone would be looking at this and going, " 196 00:10:57,719 --> 00:10:59,519 Michael Thompson: If it could happen to them, it could happen to 197 00:10:59,520 --> 00:11:00,120 Michael Thompson: any of us." 198 00:11:00,179 --> 00:11:00,930 Sean Aylmer: Exactly right. 199 00:11:01,200 --> 00:11:05,848 Michael Thompson: Now, Sean, IAG is lifting Australian home insurance prices by 200 00:11:06,179 --> 00:11:10,620 Michael Thompson: 20% and car premiums by 14%, putting even more pressure 201 00:11:10,679 --> 00:11:11,520 Michael Thompson: on households. 202 00:11:11,880 --> 00:11:15,088 Sean Aylmer: Yep. The price rise has prompted IAG Chief Executive Nick 203 00:11:15,090 --> 00:11:18,509 Sean Aylmer: Hawkins, to say he had never in his career seen 204 00:11:18,509 --> 00:11:21,870 Sean Aylmer: the whole industry push through such hefty increases across a 205 00:11:21,870 --> 00:11:25,950 Sean Aylmer: range of insurance products. " Increasing cost pressures are behind the 206 00:11:25,950 --> 00:11:29,160 Sean Aylmer: rise," he said. IAG, one of Australia's two biggest home 207 00:11:29,160 --> 00:11:33,750 Sean Aylmer: and car insurers with brands including NRMA and CGU, " Is not 208 00:11:33,900 --> 00:11:38,070 Sean Aylmer: price gouging customers," Hawkins said. Instead, it's trying to get 209 00:11:38,070 --> 00:11:41,309 Sean Aylmer: a reasonable return taking into account the material input cost 210 00:11:41,369 --> 00:11:45,179 Sean Aylmer: changes that IAG and the industry have had to put 211 00:11:45,179 --> 00:11:49,230 Sean Aylmer: up with over the past 12 to 24 months. IAG share price 212 00:11:49,230 --> 00:11:51,360 Sean Aylmer: closed up 2. 6% yesterday. 213 00:11:52,200 --> 00:11:56,519 Michael Thompson: Maggie Beer, the gourmet food producer, is looking to quadruple 214 00:11:56,520 --> 00:12:00,029 Michael Thompson: sales within five years. That's a fairly lofty goal, isn't 215 00:12:00,029 --> 00:12:03,090 Michael Thompson: it? In part by pushing into pasta products and non- 216 00:12:03,090 --> 00:12:06,960 Michael Thompson: food lifestyle, entertaining and gardening products. 217 00:12:07,890 --> 00:12:11,250 Sean Aylmer: The company ain't big, but it is often in the 218 00:12:11,250 --> 00:12:14,759 Sean Aylmer: news. It's had a rough 2023 with its share price 219 00:12:14,759 --> 00:12:18,000 Sean Aylmer: down more than 30% following weaker earnings on the back 220 00:12:18,000 --> 00:12:21,150 Sean Aylmer: of higher supply chain costs and problems at its Paris 221 00:12:21,150 --> 00:12:25,380 Sean Aylmer: Creek Farms dairy and yogurt business. Also, it bought online 222 00:12:25,380 --> 00:12:28,588 Sean Aylmer: hampers business, Hampers and Gifts, during the pandemic. That business 223 00:12:28,590 --> 00:12:31,139 Sean Aylmer: has suffered in recent quarters. It's got a new Chief 224 00:12:31,139 --> 00:12:34,799 Sean Aylmer: Executive, Kinda Grange. She talked up the company yesterday saying 225 00:12:34,799 --> 00:12:37,920 Sean Aylmer: she wants to boost revenue to $ 300 million within five 226 00:12:37,920 --> 00:12:41,429 Sean Aylmer: years. She'll push the company into pasta and sugo ranges 227 00:12:41,429 --> 00:12:44,760 Sean Aylmer: and also add to its ice cream offerings. In non- 228 00:12:44,760 --> 00:12:47,040 Sean Aylmer: food, the company will expand its range of baking and 229 00:12:47,040 --> 00:12:50,279 Sean Aylmer: cooking products under the Maggie Living banner. That currently includes 230 00:12:50,370 --> 00:12:53,550 Sean Aylmer: wooden spoons and rolling pins, Michael. I love that. Also, 231 00:12:53,580 --> 00:12:56,429 Sean Aylmer: it's going to expand into gardening tools and table setting 232 00:12:56,429 --> 00:13:00,660 Sean Aylmer: products, which of course begs the question, what is a table 233 00:13:00,660 --> 00:13:04,530 Sean Aylmer: setting product? Is it a product that you use to set 234 00:13:04,530 --> 00:13:07,229 Sean Aylmer: the table or is it just something that makes the 235 00:13:07,230 --> 00:13:08,400 Sean Aylmer: table look good when it's set? 236 00:13:08,880 --> 00:13:11,519 Michael Thompson: Well, I automatically assumed it was cutlery. 237 00:13:12,630 --> 00:13:13,050 Sean Aylmer: Is that all? 238 00:13:13,710 --> 00:13:15,870 Michael Thompson: Well, I don't know. I'm just intrigued about the gardening 239 00:13:15,870 --> 00:13:19,710 Michael Thompson: tools expansion. I just find that fascinating. Out of everything 240 00:13:19,710 --> 00:13:23,039 Michael Thompson: they could expand into that they go into gardening tools. 241 00:13:23,759 --> 00:13:25,620 Sean Aylmer: Do you know what, something about the wooden spoon, which 242 00:13:25,620 --> 00:13:29,008 Sean Aylmer: I think is totally fascinating. It is one of the 243 00:13:29,010 --> 00:13:34,380 Sean Aylmer: few products that has never improved over thousands of years. 244 00:13:35,040 --> 00:13:38,490 Sean Aylmer: So thousands of years before us, people were using wooden 245 00:13:38,490 --> 00:13:40,530 Sean Aylmer: spoons and we're still using wooden spoons because it just 246 00:13:40,530 --> 00:13:41,400 Sean Aylmer: doesn't transfer heat. 247 00:13:41,969 --> 00:13:44,578 Michael Thompson: You know what, I reject that entirely. What about your 248 00:13:44,580 --> 00:13:48,029 Michael Thompson: silicon spatulas and things? They are futuristic and you use 249 00:13:48,029 --> 00:13:50,610 Michael Thompson: those for stirring and it's so much better because it 250 00:13:50,610 --> 00:13:52,710 Michael Thompson: doesn't absorb any of the flavor or any of the 251 00:13:52,710 --> 00:13:54,540 Michael Thompson: staining if you're doing a pasta product. 252 00:13:54,870 --> 00:13:57,450 Sean Aylmer: I'm not absolutely... You may be a hundred percent correct. 253 00:13:57,900 --> 00:14:00,660 Sean Aylmer: No problems there. But the wooden spoon is something that you 254 00:14:01,020 --> 00:14:03,239 Sean Aylmer: was used a thousand years ago and is still used 255 00:14:03,690 --> 00:14:05,939 Sean Aylmer: today. I don't think the silicon products were used a 256 00:14:05,940 --> 00:14:06,539 Sean Aylmer: thousand years ago. 257 00:14:06,600 --> 00:14:09,689 Michael Thompson: No, they weren't. And I say that the wooden spoons 258 00:14:09,690 --> 00:14:11,520 Michael Thompson: should no longer be used. I'm calling for a really 259 00:14:11,520 --> 00:14:14,820 Michael Thompson: full boycott. God, that got out of hand quickly, didn't it? 260 00:14:14,820 --> 00:14:17,819 Sean Aylmer: It did. Last story. Last local story, Michael. 261 00:14:18,330 --> 00:14:21,269 Michael Thompson: Last one. Qantas. It's an airline story, Sean, I love 262 00:14:21,270 --> 00:14:26,460 Michael Thompson: airline stories. Qantas has launched direct flights from Auckland to 263 00:14:26,460 --> 00:14:27,240 Michael Thompson: New York. 264 00:14:27,750 --> 00:14:31,410 Sean Aylmer: The first flight departed yesterday, and Qantas Chief Executive, Alan 265 00:14:31,410 --> 00:14:35,639 Sean Aylmer: Joyce, said that travelers would like the longer flight because 266 00:14:35,639 --> 00:14:39,509 Sean Aylmer: it's less painful. Instead of transiting in Los Angeles, passengers 267 00:14:39,509 --> 00:14:42,510 Sean Aylmer: can now fly through Auckland and then onto New York. 268 00:14:42,779 --> 00:14:44,820 Sean Aylmer: Qantas will boost a number of flights each week to 269 00:14:44,820 --> 00:14:47,640 Sean Aylmer: four from the current three to meet what Mr. Joyce 270 00:14:47,640 --> 00:14:51,360 Sean Aylmer: described as very strong demand. Now a direct Melbourne and 271 00:14:51,360 --> 00:14:54,900 Sean Aylmer: Sydney to New York flight is scheduled for 2025 when 272 00:14:54,900 --> 00:14:59,399 Sean Aylmer: the next generation Airbus A350-1000 planes arrive. Of course, we've 273 00:14:59,400 --> 00:15:01,530 Sean Aylmer: done that story before. Qantas expects it will earn about $ 274 00:15:01,530 --> 00:15:05,550 Sean Aylmer: 400 million in extra revenue with travelers expected to pay 275 00:15:05,610 --> 00:15:09,090 Sean Aylmer: a fair premium to take those flights. More of the 276 00:15:09,090 --> 00:15:13,020 Sean Aylmer: cabins will be dedicated to business, first and premium economy seats. 277 00:15:13,679 --> 00:15:17,010 Michael Thompson: All right onto international news now, Sean. Russia has unveiled 278 00:15:17,010 --> 00:15:20,670 Michael Thompson: a windfall tax on big companies to raise an estimated 279 00:15:20,700 --> 00:15:26,340 Michael Thompson: 300 billion rubles or $ 8 billion AUD from its oligarchs 280 00:15:26,400 --> 00:15:29,280 Michael Thompson: as the war in Ukraine continues to really stretch the 281 00:15:29,280 --> 00:15:30,390 Michael Thompson: Kremlin's finances. 282 00:15:30,599 --> 00:15:35,489 Sean Aylmer: The proposed levy will require Russian groups making profits of 283 00:15:35,490 --> 00:15:38,760 Sean Aylmer: more than 1 billion rubles a year since 2021 to 284 00:15:38,760 --> 00:15:42,840 Sean Aylmer: pay a one- off tax worth up to 10% of 285 00:15:42,840 --> 00:15:45,750 Sean Aylmer: the gains, according to report in the Financial Times. Could 286 00:15:45,750 --> 00:15:50,849 Sean Aylmer: you imagine that happening in Australia or the US? One 287 00:15:50,849 --> 00:15:53,789 Sean Aylmer: senior cabinet official claimed the idea for the levy had 288 00:15:53,789 --> 00:15:58,170 Sean Aylmer: come from the companies themselves who realized they had made, 289 00:15:58,350 --> 00:16:02,639 Sean Aylmer: I quote, " gigantic" profits during the period that needed to 290 00:16:02,639 --> 00:16:08,160 Sean Aylmer: be properly taxed. It's one of a series of measures 291 00:16:08,160 --> 00:16:11,309 Sean Aylmer: to bolster the Kremlin's coffers after falling oil revenues under 292 00:16:11,309 --> 00:16:14,790 Sean Aylmer: Western sanctions and a surge in war related defense spending 293 00:16:15,030 --> 00:16:19,860 Sean Aylmer: led to Russia running up a 3. 4 trillion ruble budget 294 00:16:19,860 --> 00:16:21,510 Sean Aylmer: deficit in the first half of this year. 295 00:16:22,349 --> 00:16:26,009 Michael Thompson: Sean, Donald Trump yesterday morning pleaded not guilty to federal 296 00:16:26,009 --> 00:16:30,660 Michael Thompson: criminal charges that he unlawfully kept national security documents and 297 00:16:30,660 --> 00:16:32,970 Michael Thompson: lied to officials who sought to recover them. 298 00:16:33,540 --> 00:16:36,630 Sean Aylmer: I know we should ignore this story, but we can't. 299 00:16:37,140 --> 00:16:41,010 Sean Aylmer: Trump called the charges the most evil and heinous abuse 300 00:16:41,010 --> 00:16:44,099 Sean Aylmer: of power in America's history. He went on to say 301 00:16:44,099 --> 00:16:47,549 Sean Aylmer: that President Joe Biden had engaged in political persecution like 302 00:16:47,820 --> 00:16:51,990 Sean Aylmer: something straight out of a fascist or communist nation and 303 00:16:51,990 --> 00:16:55,830 Sean Aylmer: Department of Justice Special Counsel, Jack Smith, who brought the 304 00:16:55,830 --> 00:17:00,719 Sean Aylmer: case against Mr. Trump, he called him deranged. Mr. Trump, 305 00:17:00,719 --> 00:17:04,408 Sean Aylmer: who if convicted can still campaign to be president and 306 00:17:04,410 --> 00:17:08,310 Sean Aylmer: wouldn't be barred from taking office, is beating his closest 307 00:17:08,310 --> 00:17:12,690 Sean Aylmer: Republican rival by 30 percentage points in the polls. He's 308 00:17:12,690 --> 00:17:18,120 Sean Aylmer: also holding a winning margin over Biden, 45.5% to 43. 7%. 309 00:17:18,690 --> 00:17:20,790 Michael Thompson: All right, one last one, Sean. Mentioned this one at 310 00:17:20,790 --> 00:17:24,029 Michael Thompson: the top of the show. This is pretty extraordinary. More 311 00:17:24,029 --> 00:17:28,140 Michael Thompson: than 50 years after the Beatles broke up, founding member 312 00:17:28,140 --> 00:17:33,300 Michael Thompson: Paul McCartney says, artificial intelligence has helped create one last 313 00:17:33,300 --> 00:17:35,941 Michael Thompson: Beatles' song that will be released later this year. 314 00:17:35,941 --> 00:17:39,539 Sean Aylmer: " The song was made using a demo tape with 315 00:17:39,540 --> 00:17:43,470 Sean Aylmer: John Lennon's voice," McCartney said in an interview with BBC 316 00:17:43,470 --> 00:17:48,900 Sean Aylmer: Radio 4. Using artificial intelligence producers could take Lennon's voice and, " 317 00:17:49,380 --> 00:17:52,800 Sean Aylmer: get it pure" as McCartney put it, and then mix 318 00:17:52,800 --> 00:17:55,888 Sean Aylmer: the song. Of course, Lennon was killed outside his Manhattan 319 00:17:55,888 --> 00:18:00,990 Sean Aylmer: apartment building in December 1980. His widow Yoko Ono sometime 320 00:18:00,990 --> 00:18:04,408 Sean Aylmer: afterwards gave the demo tape to McCartney. Two other songs in 321 00:18:04,410 --> 00:18:07,050 Sean Aylmer: that tape, Free as a Bird and Real Love were 322 00:18:07,050 --> 00:18:10,138 Sean Aylmer: later completed by the three surviving Beatles, or three surviving 323 00:18:10,138 --> 00:18:15,059 Sean Aylmer: at that time, and they were released in 1995/1996. Now, 324 00:18:15,150 --> 00:18:18,330 Sean Aylmer: there's going to be one last Beatles song. Incredible. 325 00:18:18,629 --> 00:18:21,990 Michael Thompson: Yeah, it really is. Okay, up next is the Fear and 326 00:18:21,990 --> 00:18:26,129 Michael Thompson: Greed daily interview with Dermot Ryan, Portfolio Manager at Renaissance 327 00:18:26,190 --> 00:18:27,629 Michael Thompson: Smaller Companies Fund. 328 00:18:28,109 --> 00:18:30,750 Sean Aylmer: All about small caps and the fact that they have 329 00:18:30,750 --> 00:18:34,559 Sean Aylmer: been hammered in recent times, but Dermot thinks might be 330 00:18:34,559 --> 00:18:36,418 Sean Aylmer: time to have a look at them again and he 331 00:18:36,450 --> 00:18:38,790 Sean Aylmer: gives us a few suggestions about the ones he likes. 332 00:18:38,910 --> 00:18:39,330 Sean Aylmer: Great chat. 333 00:18:39,570 --> 00:18:41,820 Michael Thompson: Yeah. We're not an investing podcast, but it's well worth 334 00:18:41,820 --> 00:18:44,938 Michael Thompson: a listen. You should get professional advice before making any 335 00:18:44,940 --> 00:18:47,609 Michael Thompson: investment decisions and also while you're at it, have a 336 00:18:47,609 --> 00:18:49,888 Michael Thompson: listen to the new episode of How Do They Afford 337 00:18:49,888 --> 00:18:53,430 Michael Thompson: That, which came out yesterday. This week's episode is all 338 00:18:53,430 --> 00:18:55,978 Michael Thompson: about car loans and car leases and basically how to 339 00:18:55,980 --> 00:18:58,320 Michael Thompson: make those kinds of things work for you. Thank you 340 00:18:58,320 --> 00:18:58,948 Michael Thompson: very much, Sean. 341 00:18:59,340 --> 00:19:00,030 Sean Aylmer: Thank you, Michael. 342 00:19:00,180 --> 00:19:03,269 Michael Thompson: It's Thursday the 15th of June 2023. Make sure you're 343 00:19:03,270 --> 00:19:07,049 Michael Thompson: following the podcast and join us online on LinkedIn, Instagram, 344 00:19:07,049 --> 00:19:09,839 Michael Thompson: Twitter, and Facebook. I'm Michael Thompson and that was Fear 345 00:19:09,839 --> 00:19:11,310 Michael Thompson: and Greed. Have a great day.